NETTING IT OUT

1Q2010 was a steady quarter for customer service.

Customer growth was about the same in 1Q2010 as it was in the very good 4Q2009. Steady financial performance resulted just about across the board for our 10 suppliers.

Product activity was light in 1Q2010. There were new products or major new versions from Attensity Group, nGenera, and RightNow.

Company activity was light, too, although there were a few significant announcements. Attensity Group launched a subsidiary to serve the federal market. RightNow introduced an innovative new product subscription agreement. Salesforce.com formed a partnership with VMware to deliver Java development and a Java infrastructure to its cloud computing platform.

We continue to see four key trends in customer service: social media, assisted-service, mobile computing, and cloud computing.

We did not award Customer Service Stars for 1Q2010. While several of our suppliers delivered outstanding results in customer growth, products, financial performance, and company activity, none delivered across the board.

Customer service is positioned for a very good 2010.

CUSTOMER SERVICE WAS STEADY IN 1Q2010

1Q2010 was a steady quarter in customer service as compared to a very good 4Q2009. Customer growth, both in new business and repeat business was mostly flat, continuing at the same good level as customer growth in 4Q2009. Steady financial performance resulted. Product and company activity were light, but what was announced was significant. First quarters are seasonally slow in software and have been seasonally slow in customer service. That was true for 1Q2010.

Steady Customer Growth

Customer growth in 1Q2010 was steady as compared with 4Q2009 across customer service. Customer acquisition was flat or slightly down for most of our suppliers. Attensity Group and Salesforce.com had very slightly improved customer acquisition. Additional or repeat business from existing customers, the other component of customer growth, was also steady between 4Q2009 and 1Q2010. InQuira and IntelliResponse both had increased repeat business.

First quarters are seasonally slow for customer growth. Customers usually spend big in fourth quarters and spend first quarters implementing and deploying. We’ve seen seasonally slow first quarters several times in the six years of our customer service coverage. There’s no reason to think otherwise in 1Q2010.

Light Product Activity

Overall, product activity was light in the quarter. However, significant customer service products were announced in 1Q2010 by three of our ten suppliers. Here are the highlights:

• Attensity Group made three product announcements. Attensity Group announced new mobile functionality for Attensity Analyze for VOC and Attensity Analyze for VoC Community Advantage. The firm also announced some preliminary results from a knowledge management technology research project.
• nGenera CIM announced Version 9 of its Customer Interaction Management Suite. This is a major new version with significant improvements in many areas. New and improved within nGen KB are social media support, new knowledge sources and search sources, new UI, RSS support, and new analyses of social media and new packaged reports.
• RightNow announced RightNow CX February 10, the regular, quarterly release of its application suite. New features are all about social media, especially community.

(Note that our product review of nGenera CIM 9.0 is complete and ready for publication. You should be receiving it in a week or two.)

Product activity is picking up in 2Q2010. There have already been several significant product announcements, including:

• Astute Solutions announced RealDialog 3.0, a major new version of its KM-based, cross-channel customer service offering.
• InQuira announced InQuira Sales Intel (Intel short for Intelligence), a new application for sales personnel that uses knowledge management within sales force automation (SFA).
• KANA announced KANA 10 R2, a new release of its strategic, process-oriented SEM offering.
• RightNow announced RightNow CX May 2010. Its key new feature is RightNow Mobile. RightNow Mobile delivers customer service capabilities of RightNow CX to mobile devices, including smart phones, tablets, game consoles, and GPS systems.

Light but Varied Company Activity

Company activity was light but quite varied in 1Q2010. Here are the most significant company events:

• Attensity Group launched Attensity Government Systems (AGS), a wholly owned U.S. subsidiary of Attensity Group to serve the federal government market.
• eGain released the results of customer satisfaction surveys, very useful and valuable research.
• RightNow introduced the Cloud Services Agreement (CSA), an approach to licensing its software for enterprises. The RightNow CSA includes annual usage alignment, three-year price commitment, annual termination, annual pools of capacity, cash service-level credits, and unlimited capacity for 90-day pilots.
• Salesforce.com and VMware, Inc. announced a partnership to jointly deliver, sell, and support an enterprise Java cloud to be called VMforce. VMforce brings Java to Salesforce.com’s Force.com cloud computing platform.

Company activity as well as product activity is increasing in 2Q2010 with these significant partnerships and acquisitions:

• Astute Solutions announced a strategic alliance with Gamma Engineers to integrate Gamma Engineers’ social relationship management (SRM) suite. Astute Solutions also announced a technology partnership with 24-7 INtouch, a contact center outsourcer that lets 24-7 INtouch offer contact center outsourcing services that use Astute Solutions’ ePowerCenter and RealDialog.
• Attensity Group announced an agreement to acquire Biz360 Inc., a provider of social media monitoring and market intelligence. This is major deal. Biz360 has attractive and useful products, a large customer base with blue-ribbon references, and very valuable IP.
• Consona CRM announced a partnership with Bharti Airtel, a telecommunications services provider for organizations in Bangladesh, India, and Pakistan, to launch a new version of Consona CRM’s NetXpert desktop portal to all Bharti Airtel broadband subscribers.
• InQuira and Genesys jointly announced an OEM agreement for Genesys to offer InQuira’s knowledge platform as an integrated application within the Genesys eServices suite. InQuira also announced an agreement with SAP for integrating InQuira’s knowledge management technologies and applications within SAP CRM.
• IntelliResponse announced a partnership with Lithium Technologies to integrate its Answer Suite technology with Lithium’s Social CRM and Customer Community platform. IntelliResponse also signed a partnership with NOVO 1, a contact center outsourcer. NOVO 1 will integrate IntelliResponse Answer Suite into NOVO 1’s outsourcing offering.
• Salesforce.com acquired Jigsaw, a supplier of crowd-sourced business contact data services. In addition, Salesforce.com and Fujitsu jointly announced that they are expanding their systems integration partnership.

We describe all of these 1Q2010 and 2Q2010 events in detail within the company sections of this report...